Mortgage by unmarried people: per house or per person?

Technical topics regarding tax preparation.
#1
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I have unmarried people (boyfriend and girlfriend) living in California who share a mortgage opened in 2019 with principal amount of 1,200,000 and interest 50,000. I would like to know if you can divide the mortgage debt amount by 2, so each of them have 600,000 well below the 750,000 limitation. I searched the topic and found the following thread:

viewtopic.php?f=8&t=2909

Here is my understanding: there was a court case which decided that the mortgage debt is per house, so unmarried people cannot decide, but the case has been successfully appealed in the Ninth Circuit Court of Appeals which decided that it is person so they can divide. This is summarized in this link:

https://www.journalofaccountancy.com/ne ... 12809.html

As the info is old (6 years), I would like to know if there is any new development. Besides that, I also would like to know to know if they have to divide the amounts equally on the mortgage and property tax. For example, one person takes 1/3 of the mortgage and 2/3 of the property tax. It is not easy to find the info, so I would greatly appreciate your help. Thanks.
Please consider visiting this post where my question at the end has not been answered yet:
viewtopic.php?f=8&t=12065, thanks!
 

#2
TrueTax  
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puravidatpt wrote:As the info is old (6 years), I would like to know if there is any new development.


It looks like the Ninth Circuit Court of Appeals decision still stands that the limit is on a per-taxpayer rather than a per-residence basis. The IRS stated they would follow the decision in AOD 2016-002 at the link below:

https://www.irs.gov/pub/irs-aod/aod-2016-02.pdf

puravidatpt wrote:Besides that, I also would like to know to know if they have to divide the amounts equally on the mortgage and property tax. For example, one person takes 1/3 of the mortgage and 2/3 of the property tax.


Here is a Chief Counsel Advice memo that might help answer your question. I haven't thoroughly reviewed it, so am not sure if this gives the answer or not:

https://www.irs.gov/pub/irs-wd/201451027.pdf
 

#3
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TrueTax wrote:It looks like the Ninth Circuit Court of Appeals decision still stands that the limit is on a per-taxpayer rather than a per-residence basis. The IRS stated they would follow the decision in AOD 2016-002 at the link below:

https://www.irs.gov/pub/irs-aod/aod-2016-02.pdf

Thanks for the info, the IRS says it will follow the Voss opinion, so it will apply across the United States not limited the region covered the Ninth Circuit Court of Appeals?
Please consider visiting this post where my question at the end has not been answered yet:
viewtopic.php?f=8&t=12065, thanks!
 

#4
Nilodop  
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I think that's right.
4.10.7.2.9.8.1 (01-01-2006)
Action on Decision

It is the policy of the Internal Revenue Service to announce at an early date whether it will follow the holdings of lower courts in certain cases. An Action on Decision (A.O.D.) is the document making such an announcement. An Action on Decision is issued at the discretion of the Service only on unappealed issues, decided adverse to the government. Generally, an Action on Decision is issued where guidance would be helpful to Service personnel working with the same or similar issues. Unlike a Treasury Regulation or a Revenue Ruling, an Action on Decision is not an affirmative statement of Service position. It is not intended to serve as public guidance and may not be cited as precedent.
An Action on Decision may be relied upon within the Service only as the conclusion, applying the law to the facts in the particular case at the time the Action on Decision was issued. Caution should be exercised in extending the recommendation of the Action on Decision to similar cases where the facts are different. Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions.
Prior to 1991, the Service published acquiescence or nonacquiescence only in certain regular Tax Court opinions. The Service expanded its acquiescence program to include other civil tax cases where guidance is determined to be helpful. Accordingly, the Service may acquiesce or nonacquiesce in the holdings of memorandum Tax Court opinions, as well as those of the United States District Courts, Claims Court, and Circuit Courts of Appeal. Regardless of the court deciding the case, the recommendation of any Action on Decision will be published in the Internal Revenue Bulletin.
The recommendation in every Action on Decision is summarized as acquiescence, acquiescence in result only, or nonacquiescence. Both "acquiescence" and "acquiescence in result only" mean that the Service accepts the holding of the court in a case and that the Service will follow it in disposing of cases with the same controlling facts. The following differences are noted:
"Acquiescence" indicates neither approval nor disapproval of the reasons assigned by the court for its conclusions.
"Acquiescence in result only" indicates disagreement or concern with some or all of those reasons.
Nonacquiescence signifies that, although no further review was sought, the Service does not agree with the holding of the court and generally, will not follow the decision in disposing of cases involving other taxpayers. In reference to an opinion of a circuit court of appeals, a nonacquiescence indicates that the Service will not follow the holding on a nationwide basis. However, the Service will recognize the precedential impact of the opinion on cases arising within the venue of the deciding circuit.

 


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